Part 2 of a 2-Part Series
Last week, we started a two-part series about how to administer a hoarder’s estate. Click here to read part one of the first entry in this series. This week, we conclude that series.
Determine the fair market value of any items of value in the Hoarder’s Estate
Determine the value of non-cash items at the date of death. Typically, people hire an appraiser. Thus, you will avoid undervaluing the estate and underpaying any estate taxes. This could result in significant penalties. In addition, to evenly divide between heirs or beneficiaries, the personal representative uses the valuation to properly divide the hoarder’s estate.
Carefully document the condition of the property and the time spent sorting and cleaning
Determine the value of non-cash items at the date of death.
Typically do this by hiring an appraiser. Thus, this will help avoid undervaluing the estate and underpaying any estate taxes. So, this could result in significant penalties. In addition, if the estate will be divided evenly between heirs or beneficiaries, the personal representative can use the valuation to divide it properly.
2. Carefully document the property’s condition
Does the deceased person’s will specify the amount they will pay you? As the personal representative, the estate will award compensation. Amounts vary based on a certain percentage of the estate. Or, you could be awarded a percentage of the transactions made by the estate. Another possibility is for you to collect a reasonable fee determined by the court. However, personal representatives exact additional fees in some states. For example, providing “extraordinary” services could qualify you for compensation. Also, the personal representative could claim a fee for extraordinary services. For instance, if he or she documents that the duties of administering the estate went above and beyond the typical estate administration.
Get estimates and make repairs
Sometimes, particularly in the case of an extreme hoarder, the residence suffered damage due to the hoarding. For example, does the house boast scraped walls, broken windows, or scratched floors? If so, you should restore it prior to the sale. To prove you paid a reasonable price for repairs, obtain and present estimates to the court.
Charge expenses to the estate
Although this will reduce the value of the estate, it may also reduce estate tax liability.
The foregoing points cover some of the particular considerations relevant to the administration of a hoarder’s estate. But the personal representative of an estate performs a number of duties to discuss with an experienced estate planning attorney before and during the administration process.
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